Business to Business Marketing SID# 1031489

SID :

SID

: 1031489

To

David Torpe and Angela Brown, Managing Directors Triangle Creative Limited, Cambridge, London.

From

Micheal Pitt, Marketing Consultant Elite Consulting Limited Cambridge, London.

Title

Re : Business-to-Business Marketing report

Business to Business Marketing SID# 1031489

1.0 INTRODUCTION
As requested please find herewith Business-to-Business Marketing report that addresses your marketing concern. In the current economy that is undergoing problems, many companies are realizing that their most important asset is their customer base and keeping their existing customers as well as acquiring new faces or clients. What is even more challenging at this point in time is the realization of the need to satisfy the existing clients and at the same time gain new customers in an increasingly competitive market keeping in mind the economic state and the problem faced by TCL. Triangle Creative Ltd (TCL) a full service advertising and marketing agency is facing this economic down turn. Triangle Creative Ltd. advertising has worked well in the past but because of the economic climate and revenue being down by 25% TCL must review their marketing mix in order to combat the economic crisis. TCL is fully aware that if they do not act quickly they will begin to lose their clients and suffer loss of market share. This has raised the eye brows of TCL and although they see the economy recovering in the future they must think about the present and satisfy their existing clients as well as gain total dominance over an highly competitive market.

Business to Business Marketing SID# 1031489

2.0 Marketing Mix

2.1 Product A product is seen as an item that satisfies what a consumer needs or wants. This is regarded as anything that can be offered to a market for attention, acquisition, use or consumption, which might satisfy a want or need. Kotler et al (1999).TCL is a full agency service provider that outsources the majority of its production. They have a good working relationship with PJW Media Production that looks set to continue their relationship. TCL media services experience has worked well thus far when it comes to their client. They have customised the product knowing which works well for the client and this have given them the edge needed within the competitive market. TCL advertising has worked well in the past with its clients but in the ever changing market they need to expand their advertising market. The above the line promotions involves TV, radio, outdoor and print advertising but the use of Internet is missing. With the internet ever growing and reaches a wide range of clients this is one of the best avenue to venture. The Wharton article emphasizes on the strategic analyses on the future implications of advertising strategy. Future of Advertising a project was carried out by the Wharton Schools SEI centre for Advanced Studies in Management to find out the strategy of advertising in the coming future and critical analyses and further implication guidelines. The future advertising approaches and be indexed in a sequence depending the works worked. Partnership with the Internet Search engine:

Google Inc. a famous and more visited web search engine may facilitate the advertising to a great extent. Future Advertising Project took huge steps in examining this and found that this strategy may helpful as it will show the product information in its first pages of search and people can easily pick it up

YouTube, a popular video website of Google Inc. and the project Fast.Forward was taken by them where a mini clip of advert was shown just before immediate the video begins. This could be of better value for future advertising process for any modern company like TCL.

TCL also engages in below the line promotion which has worked well in the pass and also will continue to do well in the future. In saying this direct mailing is a tool that has become outdated and can have a cost involve, but with the use of email an e-catalogue can be sent straight to the inbox of the client displaying exactly what you want the client to view. 3

Business to Business Marketing SID# 1031489 2.2 Price Price is the value (usually measured in monitor terms) at which the seller agrees to sell product or service to the buyer and the value at which the buyer agrees (Ray Wright, 2004). The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often, it will affect the demand and sales as well. TCL should set a price that complements the other elements of the marketing mix, Triangle Creative Ltd has a rigid pricing system, where clients pay a percentage of the overall marketing budget. However, Companies who focus on price and profitability management deliver higher than average shareholder returns (Warren Wulfet, 1930). Going forward Triangle Creative Ltd is to gain new market shares and client retention it is recommended that the company should follow in a combination of the following. To obtain client TCL should lower the price and increase incentives to Triangle Creative Ltd best customer in an attempt to increase customer loyalty and higher profit margin. When setting a price, TCL must be aware of the client perceived value for the product. Three basic pricing strategies are: market skimming pricing, marketing penetration pricing and neutral pricing. The 'reference value' (where the consumer refers to the prices of competing products) and the 'differential value' (the consumer's view of this product's attributes versus the attributes of other products) must be taken into account. 2.3 Place This is seen as all the companies activities that makes the product or service available to target customers. (Kotler et al 1999) TCL is ideally located in Cambridge surrounded potential clients. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by TCL to complement the other aspects of the marketing mix. With the Accounts Executives and Designers working from home and on the road, this can be continued and will be extremely successful. Visiting the client can have a positive approach and can make the client feel like they are a VIP client to TCL, also the Accounts Executive can have a one on one approach with the client to see what is needed and what can be improved by TCL. Though the use of the World Wide Web it is only for an available website which provides background of the company, range of services and testimonials. Such technology should be capitalizing on since it proves to be not only a cost effective way to market a business but can also reach a wider scope of the target market.

Business to Business Marketing SID# 1031489 2.4 Promotion This is seen as an activities that communicate the product or service and its merits to target customers with a view to persuade them to buy. (Kotler et al 1999) This is one of the most important parts of the 4ps and TCL may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion. Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. With TCL involve with Trade Fairs and trade magazines they must also look to include cost effective ways of advertising. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations. This has worked for TCL in the past but with the current economic situation this can no longer be relied upon. What is important to remember when it comes to promotion in an economic downturn is to not cut the promotion costs (Kksal and zguls, 2007). As mention earlier the internet is one of the best ways of getting information around with minimal cost. The internet is becoming more ubiquitous, more social and also more immediate and that is upsetting all sorts of business models Kevin Werbach, Professor at the Wharton has critically analyzed the interactions and dependence among the three of Brand, Internet and the Customer. According to him, the Fast.Forward project on the YouTube channel was able to collect a huge number of 12,500 viewers as well as the subscribers in a very few days. Fig. 1

(http://www.youtube.com/user/FastForward/video)

Business to Business Marketing SID# 1031489 Advertising in Social networking sites:

Facebook, a well known social networking site can play the vital role in communicating with the client.

Twitter can also play in internet advertising process in the way of social communication like Facebook too.

These are just some of the avenues and cost effective ways that TCL and venture into in the near future.

Business to Business Marketing SID# 1031489

3.0 Relationship Variables and Business Networks

3.1 Analysis of the Key Relevance Variables The economic downturn impact on Triangle Creative Ltd business-to-business relationship is essential in order to sustain successful working relationship with the clients. These relationships provide direct benefits because they grant access to other relations, organizations, resources and competences (Hakansson &Snehota, 1995; Walter Ritter, &Gemunden, 2001). TCL is embedded in a network of ongoing business relationship. A business enterprise looks more like a linking unit where its strategic attributes lie in how it connects other market participant to each other. Thus, the picture of both the possibilities and the means to manage the business enterprise becomes quite different(Hakansson &Snehota, 1995). TCL business to business relationships are important in their survival in the current market. (Hakansson, 1987) suggest that a firms relationships are one of the most valuable resources that a company possesses. Research suggests that firms engage in social embeddedness for more than economic benefit, but for the continuation of organizational interaction. (Johannisson Ramirez-Pasillas and Karlsson, 2002)

3.2 The Interaction Model The marketing and purchasing of industrial goods is seen as an interaction process between two parties within a certain environment. Metcalf et al. (1992) make the point that the interaction model seems to be the best equipped to deal with the various issues pertaining to buyer-seller relationships. Our way of analysing industrial marketing and purchasing has four basic elements which in turn are sub-divided. These are: The interaction process The participants in the interaction process The environment within which interaction takes place The atmosphere affecting and affected by the interaction

3.2.1 The Interaction Process The interaction process is regarded as a comprehensive description of buying and selling which is more than a coinciding process. The model represents a new twist to the traditional business in it, Brennan Turnbull (1998). The relationships between buying and selling companies in industrial markets are frequently long term. Thus, it is important in our analysis to distinguish between the individual `Episodes' in a relationship, e.g. the placing or delivering of a particular order, and the longer-term aspects of that relationship which both affects and may be affected by each episode. The interaction exchange process within Triangle Creative Limited as seen as the services out sourced to PJW Media, business-to business relationship with their clients i.e. Theme park, Furniture retailer,

Business to Business Marketing SID# 1031489 University, Garden centre, Staff members from the various departments, outdoor sales force, relationship with local business communicate, and trade fairs.

3.2.2 The Interaction Environment The interaction between a buying and selling firm cannot be analysed in isolation, but must be considered in a wider context. The IMP group also states that it is not only the elements of the interaction which influence the interaction process, but also the characteristics of the organizations and the people that represent them. These characteristics are peculiar to the technology adopted, organizational characteristics, and the individuals involved.

(a) Market structure Firstly, a relationship must be considered as one of a number of similar relationships existing either nationally or internationally within the same market. (b) Dynamism The degree of dynamism within a relationship and in the wider market affects the relationship in two ways that are opposite to each other. (c) Internationalization The internationalization of the buying or selling market is of interest as it affects either firm's motivations in developing international relationships. (d) Position in the manufacturing channel A further aspect of the environment which must be brought into consideration is the position of an individual relationship in an extended `channel' stretching from primary producer to final consumer. (e) The social system As well as the effects of both horizontal market and vertical channel influences on a relationship, we must also consider the characteristics of the wider environment surrounding a particular relationship the social system. This is particularly relevant in the international context where attitudes and perceptions on a generalized level can be important obstacles when trying to establish an exchange process with a certain counterpart.

3.2.3 The Atmosphere The relationships between buying and selling firms are dynamic in being affected by the individual episodes which take place within them. The atmosphere of a relationship is described as a product of the relationship which is influenced by a group of variables internal to that relationship. These variables include power/dependence, closeness/distance of relationship, cooperation/conflict, and mutual expectation. At the same time they have the stability which derives from the length of the relationship, its routinization and the clear expectations which become held by both parties.

Business to Business Marketing SID# 1031489

Fig. 2

Organization Technology Structure Strategy Individual Aims

Experience

Product / Services Information Financial Social

Organization

Interaction Process Individual

Source : IMP Interaction model, Cited, (Hakansson , 1982, p. 24)

3.3 Analysis of the Business Networks When considering the business landscape the traditional view has been to see it as an environment where companies has to compete against each other to survive and where each company is an closed unity with only necessary interaction with other companies. (Hkansson, et al. 2009) offer a new framework that views the business landscape as an environment where the companies are interdependent and where the important aspect is the different ways of involvement between the companies even though they are rivals. (Hkansson, et al. 2009) differ between business in theory and in practice, where in theory businesses are seen as independent companies that is only affected by competition, but in practice it is about coping with different situations while interacting with other companies. Figure 3 summarizes the Activity Resource- Actor (ARA) model as well as briefly defines actors, activities and resources, described below.

Business to Business Marketing SID# 1031489

Figure 3: The Activity-Resource-Actor model

Business interaction between companies affects the resources and the people that are involved in it and the activities they perform. This is the base for the ARA model that is the refined view of business interaction. The ARA model is a conceptual framework that describes the outcome of an interaction process in three layers between the companies; the actor bonds, the resource ties and the activity links (Hkansson, et al. 2009). The ARA model is based on the knowledge of different interaction processes between companies, both long term processes such as production and transportation, as well as short term processes, where interactions within these processes involve more costs than benefits for one or more of the actors. In the ARA model, the three layers are connected to each other and is the base for the wider network. If one of them is developed or changed, it can open up for new possibilities and changes in the two others, or in the connections between them. (Hkansson, et al. 2009) emphasizes that the changes in actors, resources and activities not only affects them in the certain context they are viewed, but also the different interplays beyond the specific situation. It is therefore of importance to understand the three layers and the connection between them in order to understand business interaction. The section begins with the actor layer, followed by the resource layer and finalize with the activity layer. 3.3.1 Actor Layer The actor layer is a reflection of the bonds between the different actors involved in the business interaction. These actors consist of different companies that have bonds between them due to the interaction between the companies. The bonds between companies are in fact bonds between the individuals in the companies, and it is these bonds, and the strength of these, that influence the activities and the resources used in a certain transaction. The actor bonds are important in the development of new transactions between companies as well as in identifying possible solutions in current transactions.

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Business to Business Marketing SID# 1031489 It is the actors that can tie together the resources and activities and therefore execute the actual interaction processes. Therefore, actors have some different aspects to consider in comparison to resources and activities. Most importantly, actors are not insulated features; they are actors only in relation to other actors, which mean that they are thus situated in a web of other actors by definition (Hkansson, et al. 2009).

3.3.2 Resource Layer The resource layer consists of the resources that the actors have available, divided into tangible resources, e.g. physical items such as plant or equipment, and intangible resources e.g. knowledge or information. The resource layer is the adaption of resources and how well they are tied together. These resource ties arise as the actors mutually adapt their resources over time (Hkansson, et al. 2009).

3.3.3 Activity Layer The activity layer is the links between the actors that connects them together. The links can be activities such as production, logistics, administration, deliveries and information handling that is more or less integrated with each other. The activity links are strongly affecting the relationship between actors, and have substantially economic effects for the actors (Hkansson, et al. 2009). The activities in business interaction processes are all related to each other, and these relations occur no matter what the intentions of the actors are. They will affect the different actors in the network, and therefore will need coordination in order for the actors to fully utilize their potential. The activities can also be occurring in one point in time, or reoccurring over a period of time, with specific effects on the entire network. (Hkansson, et al. 2009)

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Business to Business Marketing SID# 1031489

4.0 Structuring the Sales Force

Sales force represents a major investment for any organization, it is seen as the link between the company and the customers. The sales force plays an important role in after sales service and can make a difference for the company. Sales force gather information about competition and customer changing demands. It is therefore important that companies have a well-designed and structuring sales force. A well-structured sales force is essential for connecting effectively with customers(Andris, Sinha and Lorimer, 1994). Given the economic downturn and current competition within the market have forced TLC to rethink their sales strategy.

Fig. 4

Customer Base

Product base

Teritory Base

Acount Base

Source: The Authors interpretation

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Business to Business Marketing SID# 1031489

4.1 CUSTOMER BASE This may be regarded as structuring sales forces by type of clients the company serves. If organizations sell to a variety of clients, it may be helpful for your sales people to focus on the approaches that work best for a particular type of client. Allowing sales people to specialize their approaches to their client base can help them to be more effective. Advantage and disadvantage may be seen in the table 4.1

Fig. 4.1

Advantage

Efficiency activities

in

performingselling

Geographic duplication
Disadvantage

Customer duplication Need for coordination

Online Source: http://smallbusiness.chron.com/types-sales-force-specialization-3122.html

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Business to Business Marketing SID# 1031489 4.2 PRODUCT BASE Product base may be seen as the sales force specializing in particular product lines that are technically complex, highly unrelated, or very numerous. This is seen as the sales force becoming and experts in one or two products or services instead of the entire line. This works well in highly technical fields or in sales to professionals. As a result the sales force may be divided and would require good product knowledge and even technical expertise to be able to demonstrate products to customers. Advantage and disadvantage may be seen in the table 4.2

Fig. 4.2 Salespeople become expertsin product attr. & applications Advantage Management control overselling effort

High cost
O

Disadvantage n
l i n

Geographic duplication Customer duplication

e Source: http://smallbusiness.chron.com/types-sales-force-specialization-3122.html

4.3 TERRITORY BASE This is a straight forward way of organizing a sales force and is geographically focused. The concept of this is sales force specializes in a certain area; the sales force can scour it thoroughly and understand its workings. Geographically-based sales allow sales force to know their markets and develop appropriate approaches to an area. Advantage and disadvantage may be seen in the table 4.3 Fig. 4.3

Low Cost
Advantage No geographic duplication No customer duplication Fewer management levels

Limited specialization Disadvantage

Lack

of

management

control

over

product or customer emphasis

Online Source: http://smallbusiness.chron.com/types-sales-force-specialization-3122.html

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Business to Business Marketing SID# 1031489

4.4 ACCOUNT BASE This type of sales force usually deals with one or very few major accounts while other customers are dealt with in a more generalize way. This type of sales force usually builds close relationship with their customer and maybe even be based part or all of the time in the customers workplace. A disadvantage associate with this is getting to close with wit the customer since this may hamper or restrict negotiation and potentially add to overall costs

Salespeople
Advantage

develop

better

understanding of unique customer needs Management High cost control overselling

allocated to different markets.

Disadvantage
`

Geographic duplication

Online Source: http://smallbusiness.chron.com/types-sales-force-specialization-3122.htm

Fig. 4.4

4.5 RECOMMENDATIONS FOR TCLS SALES FORCE Given the economic down turn and availability of new technologies this method would deem costeffective and suitable since the cost required would be low, with no geographic duplication no customer duplication and few management level. It is recommended that Triangle Creative Ltd divide their sales force according to that Territorial Base since this research has proven to be the most effective as well as cost effective traditional model in specific situation such as an advertising agency (based on research by Eric Feigenbaum, 2008). In this scenario, the sales force may be divided both inside and outside.

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Business to Business Marketing SID# 1031489

5.0 Conclusion
The aim of this paper has been to develop the empirically derived idea that interaction is the core process of the business landscape. The idea of business interaction involves a radical departure from the view of the business landscape as a market in which transactions can be considered as discrete entities and in which the activities of marketing and purchasing can be understood as generalities or in isolation from each other. The idea of business interaction suggests that the process between each set of counterparts is unique and may involve multiple episodes over time. This infers a structure for the business landscape composed of individually significant and interconnected interaction processes of which products or services are simply the most immediately apparent outcomes. The idea of business interaction shifts analysis to the activities and resources of companies and the ways that these are adapted through interaction. This analysis shows that business actors, activities, resources are not simply the result of individual company strategy but are equally the outcome of specific interaction processes. An interactive view of business opens up a wealth of issues and opportunities for managers. Firstly, an interactive view of business de-emphasises the independent status and the internal resources of a company and envisages management as a process of working within a structure of specific interdependencies with others. These interdependencies exist within each layer of interaction; activities, resources and actors and emphasise that the knowledge on which operations are based is not bound by corporate borders, but effectively exists between companies.

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Business to Business Marketing SID# 1031489

6.0 References
Achrol, R. S. & Kotler, P. (1999).Marketing in the network economy. Journal of Marketing, 63 (Special issue), 146-163 Adler, P. S. and Kwon, S-W (2002), Social capital: Prospects for a new concept, Academy of Manangement Review, Vol 27, No.1, pp. 17-40. Ebers, M. (ed.) (1994), The Formation of Inter-organisational Networks. Oxford University Press. Hakansson, H., 1982. International Marketing and Purchasing of Goods: An interaction Approach. Hkansson, H. (1982), International Marketing and Purchasing of Industrial Goods, Wiley & Sons, USA. Hkansson, H. (2009), Comment on Actors, Resources, Activities and Commitments, Industrial Marketing Management, 38, pp.562 Hkansson, H. and Johansson, J. (1992), A Model of Industrial Networks, in Industrial Networks: A New View of Reality, eds. Axelsson, B. and Easton, G., Routledge, London, pp. 28-36. Patton, M. Q. (2002), Qualitative Research & Evaluation Methods, Sage Publications, Thousand Oaks, London. Perren, L. and Ram, M. (2004), Case study method in small business and entrepreneurial research: Mapping boundaries and perspectives, International Small Business Journal, Vol. 22, No. 1, pp. 83-101. Wright, R., 2004. Business-to-Business Marketing. Harlow: Pearson

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Business to Business Marketing SID# 1031489

Bibliography
Achrol, R. S. & Kotler, P. (1999).Marketing in the network economy. Adler, P. S. and Kwon, S-W (2002), Social capital: Prospects for a new concept, Academy of Manangement Review, Vol 27, No.1. Ebers, M. (ed.) (1994), The Formation of Inter-organisational Networks. Oxford University Press. Hakansson, H., 1982. International Marketing and Purchasing of Goods: An interaction Approach. Hkansson, H. (1982), International Marketing and Purchasing of Industrial Goods, Wiley & Sons, USA. Hkansson, H. (2009), Comment on Actors, Resources, Activities and Commitments, Industrial Marketing Management. Hkansson, H. and Johansson, J. (1992), A Model of Industrial Networks, in Industrial Networks: A New View of Reality, eds. Axelsson, B. and Easton, G., Routledge, London. Patton, M. Q. (2002), Qualitative Research & Evaluation Methods, Sage Publications, Thousand Oaks, London. Perren, L. and Ram, M. (2004), Case study method in small business and entrepreneurial research: Mapping boundaries and perspectives, International Small Business Journal, Vol. 22, No. 1. Wright, R., 2004. Business-to-Business Marketing. Harlow: Pearson

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